Marathon Digital Holdings reported a $1.71 billion net loss for the fourth quarter of fiscal 2025, the company said after markets closed on Feb. 26, 2026. The loss was driven largely by a $1.5 billion non-cash impairment on its Bitcoin holdings, underscoring how miner results can swing with BTC prices under impairment accounting.
The print mattered less as a single ugly quarter and more for what it sat next to strategically. Marathon paired the loss with a joint initiative with Starwood Capital to convert parts of its mining footprint into AI data centers, and the stock rose even as the income statement deteriorated.
Earnings mechanics behind the loss
Marathon said the quarter delivered a $1.71 billion loss, or $4.52 per diluted share, versus $528.3 million in net income, or $1.24 per diluted share, in the same quarter of 2024. That year-over-year reversal is a reminder that miners can look profitable or deeply unprofitable depending on where Bitcoin is trading when accounting marks are taken.
On a full-year basis, the company reported a $1.3 billion net loss for fiscal 2025, even as revenue grew. Marathon said full-year revenue rose 38% to $907.1 million, which highlights the gap between operating scale and reported profitability when digital-asset marks dominate the quarter.
Management attributed the quarterly swing primarily to the $1.5 billion non-cash impairment tied to a reported year-to-date Bitcoin price decline of about 26%. At the same time, mining economics moved the wrong way, with the average cost to mine one BTC rising to $48,611 in Q4 2025 from $31,608 in Q4 2024. Purchased energy costs averaged $0.04 per kilowatt-hour, a detail that matters because power remains the core variable in miner margins.
AI data centers as a second act
Alongside the earnings update, Marathon disclosed a partnership with Starwood Capital Group to repurpose some power-dense mining facilities for AI and cloud workloads. The company framed the project around near-term IT capacity of 1 GW, with a longer-term ambition of 2.5 GW, effectively pitching a new monetization path for its existing energy assets.
Investors appeared to lean into that optionality. Marathon’s shares rose roughly 16–17% after the announcement, suggesting the market is willing to look past impairment-driven volatility if the AI buildout can become a credible revenue driver.
The results also put two themes in the same frame: price sensitivity and infrastructure reuse. Marathon’s profitability remains tightly linked to BTC through impairment accounting, while its energy footprint can be redeployed into higher-value compute markets if execution is real. The company ended fiscal 2025 holding 53,822 BTC, valued at about $4.7 billion at year-end, which leaves the balance sheet highly exposed to crypto price moves.
For market participants, the near-term takeaway is a split-screen story. There is ongoing liquidity and valuation risk tied to mark-to-market style dynamics for digital assets, while the Starwood deal is a strategic attempt to diversify toward contracted AI and cloud workloads. Whether that pivot meaningfully reduces exposure to future Bitcoin price shocks will come down to how quickly capacity is converted and monetized, not the announcement itself.